Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Special Review: State and City Contracts with the
Minnesota Council on Compulsive Gambling

 

Financial Audit Division Report 05-33 Released June 3, 2005

Key Findings:

  • The Minnesota Council on Compulsive Gambling received payments for costs not allowed under the state or city contracts (Findings 1 and 6, pages 10 and 22). The council did not have adequate support for some of the costs it charged to the contracts.
  • Some of the council’s deliverables under the state contract did not meet the state’s expectations and were late (Finding 3, page 13). The council did not provide all of the deliverables required under the 2002 and 2003 city contracts.
  • The Department of Human Services did not verify the financial information that supported the council’s reimbursement requests under the 2002-2003 grant contract.
  • The City of Duluth did not include key accountability provisions in its contracts with the council.
  • The Legislature should consider either allowing the Department of Human Services to competitively award compulsive gambling funds or giving state agencies more explicit authority over the grant funds.
The audit report contained a total of 10 findings; 5 relating to the State of Minnesota contracts and 5 relating to the City of Duluth contracts.
  

Audit Scope:

We conducted a special review of the Minnesota Council on Compulsive Gambling’s financial management of public funds received from the Minnesota Department of Human Services and the City of Duluth during the period from November 28, 2001, through December 31, 2004. We conducted the special review after receiving allegations about the council’s management practices and the quality of its services.


Background:

The Minnesota Council on Compulsive Gambling is a nonprofit organization that received a majority of its funding through state and City of Duluth contracts. The council reported about $500,000 in revenue in calendar year 2004.

Although we do not have audit jurisdiction for the City of Duluth, we agreed to include the city’s contract as part of our special review.

 

 

More Information

Office of the Legislative Auditor ♦ Room 140, 658 Cedar St., St. Paul, MN 55155